Going through the divorce process can be a
stressful experience. After all, couples are put in a position to split up
nearly every aspect of the years they spent together. For some couples,
addressing the financial aspects of divorce can become particularly
contentious, since both parties want to maintain a sense of financial security
after divorce.
From time
to time, one spouse might be inclined to conceal marital assets during divorce in order
to avoid splitting them. In addition to the possibility of a contested divorce settlement, this
can also open the door to a tax audit conducted
by the Internal Revenue Service.
Every
year, people indicate their marital status on income tax filings to
federal (and Georgia) officials. Because some people choose to hide assets
during divorce, this could be viewed as a signal to initiate an audit. Even if
both spouses have been transparent about their assets, and don't have to worry
about tax violations, an audit is still an intimidating experience.
One other
thing to keep in mind: Hidden assets might automatically be reported to the
IRS. According to a report from Forbes, judges are legally bound to notify
officials about potential inconsistencies in asset reporting found during
divorce.
This may
be of particular concern in divorces that involve a significant amount of
assets. Transferring a large amount of funds, which is likely to happen in a
high-asset divorce case, might be of particular interest for investigators
looking to find issues in tax filings.
Ultimately,
it may be best to work through divorce in an amicable fashion. By aiming toward
a fair settlement, both spouses expect a stable post-divorce financial
situation. Not only that, but this could prevent a whole host of unwelcome
legal issues from springing up.
Source: Forbes, "Divorce
Causes Tax Audits," Cameron Keng, Feb. 10, 2014
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